Solution to Assignment Problem 15-4

Solution to Assignment Problem 15-4 - Opening UCC $32,500...

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Solution to Assignment Problem 15-4 The NIFTP and Taxable Income for Fortan Ltd. for the period ending Dec. 31 is as follows: Accounting Net Income Before Taxes $59,835 Add Back: Golf Club Membership Fees $1,080 Non-Deductible Portion of Meals 410 Warranty Reserve 4,440 Depreciation Expense 12,384 Charitable Donations 2,160 Reserve for Self-Insurance 2,322 22,796 Deduct CCA (See calculation) ( 6,309 ) NIFTP $76,322 Deduct Division C Deductions: Charitable Donations: United Way Appeal $1,680 US Organ Transplant ( disallowed ) Non-Capital LCF 10,800 (12,480 ) Taxable Income $63,842
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CCA Calculations for Fortan: (1) CCA for Furniture & Equipment
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Unformatted text preview: : Opening UCC $32,500 Half net Additions (1/2) ($2,000) 1,000 CCA Base $33,500 Rate (Class 8) 20% Full Year CCA $ 6,700 Pro-rated for short Fiscal Year 245/365 CCA for Furniture & Equipment $ 4,497 (2) CCA for Delivery Van : Opening UCC $ Half net Additions (1/2) ($18,000) 9,000 CCA Base $ 9,000 Rate (Class 10) 30% Full Year CCA $ 2,700 Pro-rated for short Fiscal Year 245/365 CCA for Delivery Van $ 1,812 Total CCA for Fortan Ltd.: CCA for Furniture & Equipment $ 4,497 CCA for Delivery Van 1,812 Total CCA $ 6,309...
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